Chase expects to close branches in Illinois

September 26, 2008

JPMorgan Chase & Co. acknowledged on Friday that Illinois is among the states where it's likely to close branches due to its overlap with newly acquired Washington Mutual Inc.

"There are some geographies where we overlap each other," including Illinois, said Chase, which late Thursday acquired the failing thrift. Both companies have two of the biggest branch footprints in the area. Branches near each other might be closed but not sold, it said.

"Those consolidations could be from a WaMu branch or a Chase branch," the company said. Decisions will depend on such factors as location and lease terms.

Chase has said that, nationally, it might close about 400 branches but it hasn't given a geographic breakout.

"We've got expense numbers, but even in places where we intend to close branches, in places like Illinois, even though we might consolidate branches we hope to find a lot of people jobs in the company" as attrition occurs, Chase said.

It hopes to begin branch conversions next year.

WaMu expanded aggressively in the Chicago area in 2003 but made little inroads in gathering deposits.

Chase and Bank of America Corp. are currently virtually tied in deposit market share since BofA last fall bought LaSalle Bank, which had been Chicago's second-biggest deposit gatherer.

Chase currently has about 340 branches in the Chicago market, more than any other bank in the area by a wide margin. Its deposit market share is 14.5 percent as of June 30, 2007, the latest period for which numbers are available from the Federal Deposit Insurance Corp.

Peaking in the Chicago area with more than 170 branches, WaMu currently has 117 Chicago area branches, giving it the seventh-biggest footprint among Chicago-area deposit gatherers. But it ranks 28th in deposit market share with 0.51 percent of the market.

Chase and WaMu have significant overlap in the Chicago area, according to a study done in March by SNL Financial on behalf of the Chicago Tribune.

At that time, more than 160 Chase branches had at least one WaMu branch within one mile.

"If JPMorgan Chase purchased Washington Mutual, there would be ample opportunity for the combined bank to streamline operations by closing some of the branches," SNL told the Tribune. At the time, WaMu had more than 140 branches.

Deposits at the WaMu branches paled in comparison to deposits at the nearby Chase branches.

For example, a Chase branch at 2555 W. Golf Road in Hoffman Estates had $78.1 million in deposits in March; a WaMu branch at 2561 W. Golf Road had only $43.1 million in deposits.